January 28th, 2023: Intel's Cash Flow Comeback
One thing I've been impressed with is successful people who are constantly learning. So, when my three-year-old and six-year-old were up at 5am today, I used the extra hours awake to learn.
I came across this graph and I thought it properly captured the three ways to maximize cash flow in one slide, so I had to share it with you.
Image Source: Corporate Finance Institute
I am closely watching the Intel situation in my backyard that wiped out $8bn of market cap this week. This excerpt from Why did Intel stock go down today? explains some critical cash flow issues that I believe Pat G will figure out.
"... [Intel] expects negative free cash flow of $14B, down from a prior view of negative $3B... we agree that macro [economic issues] are the primary driver of this shortfall, Seymore, who has a hold rating on the stock, said. We cannot ignore the Intel-specific dynamics exacerbating this pain, such as overly confident revenue outlook and hiring in 2022 and data center roadmap issues."
My Bold Prediction: I imagine the inevitable rightsizing as well as cutting the dividend and figuring out a path forward in Europe (i.e., Italy) will recover lost momentum and make investors bullish on Intel.
In closing, this will be helpful for the state as Intel employs 13,000 in California and for Folsom that just cut 111 jobs at the R&D campus.
Current price at publication: $28.16 (Nasdaq: INTC) Annual Dividend Yield is at 5.18% ($0.36 per quarter).